Bitcoin miners busted? Police confuse bitcoin power usage for pot farm

Wed May 25 05:44:30 PDT 2011

(from-the-lulz-dept)

http://blogs.computerworld.com/18335/bitcoin_miners_busted_police_confuse_bitcoin_power_usage_for_pot_farm

May 23, 2011 - 2:52 P.M.

    TAGS:bitcoin, bitcoin miner, P2P, virtual currency

    IT TOPICS:Emerging Technology, Internet, Open Source, Privacy, Security

Bitcoin, one of the world's newest currencies, is an open source,
peer-to-peer currency that does not exist in physical form. It's owned and
traded by means of an anonymous P2P network, without any third-party
intermediary like a payment processor, without any government issuing or
tracking the virtual currency. While there is a limit of only 21 million
bitcoins to be generated by the year 2140, bitcoin is "free" to generate and
is created by "bitcoin miners."

I haven't played around with bitcoin, but Launch called bitcoin peer-to-peer
currency "the most dangerous project we've ever seen," suggesting it could
"topple governments, destabilize economies and create uncontrollable global
bazaars for contraband."

According to Big Think, bitcoin will be a bank for Anonymous. "The
hacktivists now have a virtual currency that's untraceable, unhackable, and
completely Anonymous."

Wired UK tried to explain how bitcoin miners dedicate their CPU/GPU to
generate the virtual currency. "It's generated by Bitcoin 'miners' over time
by using CPUs and GPUs to solve a cryptographic problem -- hashing some data
against a function. If your computer manages to generate a hash that's
numerically lower than a defined value, then you shout it out to the rest of
the network, and get to pocket the newly-minted Bitcoins, while also signing
a series of transactions and making sure they're legitimate."

One of the issues, other than if governments will try to outlaw bitcoin, is
the high amount of electricity needed to create a single bitcoin. It might
cost more to generate a bitcoin than the actual value a bitcoin is currently
traded at. High electricity bills can lead to marijuana busts. And it is this
unusual power consumption needed that caught my attention since it appears as
a bitcoin miner has been mistaken as a person running a marijuana growing
operation.

Blogger Mike Esspe captured an IRC chat that supports the rumor floating
around that at least one bitcoin miner has been arrested.

In regards to if being a miner will bring the cops to your doorstep,
according to the Bitcoin Miner, the power consumption will be somewhat like
the electric usage for "marijuana grow-op." An example was "The Canadian town
of Mission, BC has a bylaw that allows the town's Public Safety Inspection
Team to search people's homes for grow ops if they are using more than 93 kWh
of electricity per day." There have allegedly been reports floating in IRC of
two different cases of police showing up at a bitcoin miner's residence with
a search warrant.

Will it become more common to confuse bitcoin miners with weed-growing
operations? It is somewhat common for police to monitor unusually high power
consumption if a person is a "suspect." For example, as NetworkWorld noted,
Ohio police and the DEA file at least 60 subpoenas each month for energy-use
records of people suspected of running an indoor pot growing operation. If a
stakeout does not uncover anything illegal or point to a "grow house," then
utility consumption records can be sought. DEA Agent Anthony Marotta said
high electricity usage does not always mean the residence is an indoor pot
farm and has surprised federal agents. "We thought it was a major grow
operation ... but this guy had some kind of business involving computers. I
don't know how many computer servers we found in his home."

It is unclear at this point if more bitcoin miners will have police show up
with a warrant on their doorstep after more false positives, mistaking the
power consumption to create virtual P2P currency as electricity usage needed
to grow weed.

The video below helps explain more about what bitcoin really is.